Bulk transport firms ride chemical increase

Monday, February 25, 2013

After a nearly 1-percent gain in December, the Chemical Production Regional Index rose by 0.7 percent in January, according to the American Chemistry Council.
Chemical production increased across all major producing regions, as year-over-year chemical production rose by 0.9 percent, the ACC added.
Bulk transportation trucking companies see this increase as an opportunity to ramp up the chemical transport side of their businesses.
Quality Distribution, for example, is looking to benefit from this upward trend in chemical production. According to the company’s fourth-quarter results, operating revenue in the chemical logistics segment climbed by 2.6 percent to $119.1 million. Quality’s total revenue finished the quarter at $215.4 million in total revenue.
"Our chemical and intermodal businesses delivered solid fourth quarter results, and this trend has continued thus far into 2013," Quality’s Chief Executive Officer Gary Enzor said in a statement. "Although our energy logistics business had a difficult quarter from an earnings perspective, our team held top-line revenues versus the third quarter and is committed to improving operating profitability and optimizing the fleet across our footprint."
For the full year, Quality’s revenue of $842.1 million showed a 12.9-percent rise over 2011’s results. Operating income finished the year at $49.1 million after taking a $10.9 million hit for costs associated with the termination of an affiliate relationship, acquisitions, Hurricane Sandy and legal settlements.
According to the ACC, organic and inorganic chemicals, industrial gases, plastic resins and synthetic rubber production have all seen significant gains the past three months. Pharmaceutical production remained flat, and the production of pesticides and fertilizers showed declines.
The Ohio Valley region showed the biggest chemical-production increase in January (0.9 percent) on the strength of basic chemical and synthetic rubber production. This increase follows a 1.3-percent gain in December. The Gulf Coast experienced a 0.8-percent increase, with the remainder of the ACC’s five regions showing increases of 0.7 percent in January. Year over year, the Ohio Valley experienced the biggest jump at 5 percent, with production up by 3 percent, year over year, in the Gulf Coast. - Jon Ross